The U.S. Department of Treasury phased out the issuance of paper savings bonds through traditional employer-sponsored payroll savings plans. As of September 30, 2010, federal employees are no longer able to purchase paper savings bonds through payroll deduction. The end date for all other (non-federal) employees is January 1, 2011.

Why is Treasury discontinuing the issuance of paper bonds
through payroll savings plans?

With TreasuryDirect, Treasury can continue to offer employees the convenience of payroll
savings while reducing the cost of the savings bond program. Employees have the
benefit of regularly investing in savings bonds or using their payroll contributions to
purchase a broader range of securities. Savings bonds in TreasuryDirect are
electronic securities in an account; they have all of the benefits of paper bonds but
can't be misplaced or destroyed. Printing fewer paper bonds reduces the cost of the
savings bond program and fits with our long-term goal of one day issuing all of our
securities electronically. Technology makes it possible for us to sell and maintain
savings bonds and other Treasury securities electronically, which lowers the expense to
the taxpayer.

How does the change affect me?

To continue your payroll savings, you'll need to open a TreasuryDirect account. You
can continue purchasing savings bonds (or other Treasury securities) and hold them
electronically in TreasuryDirect. You will not be able to purchase paper bonds through a
payroll savings plan after the applicable end date.

What happens to the paper bonds I already
own?

The bonds you own are valid issues of the U.S. Treasury. Treasury will continue to provide service and support to bond holders.

When will the paper payroll program end?

The paper payroll program ended for federal employees on September 30, 2010, and for all other (non-federal) employees on January 1, 2011. Treasury accepted payroll purchase orders for bonds with issue dates through September 2010 and December 2010, respectively. Your employer may choose to stop participating in the program before the established end dates.

Are you planning to eliminate all paper
bonds?

The change discussed in this FAQ affects paper savings bonds issued through payroll savings plans. As of January 1, 2012, paper savings bonds are no longer available at financial institutions.

What happens to the partial amounts I contributed that
haven't yet been used?

The transition period we're providing will in many cases allow deductions to accrue to the full issue price of a savings bond. At the end of the transition period, if there is a residual amount, it will be refunded. Of course, employers and employees can choose to end deductions at any time.

How can I buy paper bonds?

As of January 1, 2012, paper savings bonds are no longer available for purchase at financial institutions. If you receive a tax refund, you can use it to purchase paper Series I savings bonds by indicating the purchase on standard IRS forms when you file your return. For more information, visit www.treasurydirect.gov/indiv/research/faq/faq_irstaxfeature.htm.

What is TreasuryDirect?

TreasuryDirect is a secure web-based system that allows investors to establish accounts
to purchase, hold, and conduct transactions online. Investors can purchase Series EE and
I savings bonds, Treasury bills, notes, bonds, and Treasury Inflation-Protected
Securities (TIPS) through TreasuryDirect. Paper savings bonds are not sold through TreasuryDirect.

What are the advantages of TreasuryDirect?

TreasuryDirect is a convenient way for you to save on a regular basis by purchasing electronic
Treasury securities. With TreasuryDirect:

You can buy, manage, and redeem Treasury securities online 24/7, all from the
convenience of home, work, or wherever you have secure Internet access.

You can schedule recurring purchases for savings bonds up to five years in advance.
Marketable securities purchases can also be scheduled in advance. If you're
interested in this option, you'll find more information on our web site, www.treasurydirect.gov and in your TreasuryDirect account.

Savings bonds purchases are generally added to the account in just one business
day.

Since the securities are electronic, there is no paper to lose, nor do you need to go
to your local bank to redeem them.

When the funds are needed, and after the minimum holding period has been reached, you
can redeem part or all of your savings bond(s). The payment will be deposited to the
checking or savings account you choose. Redemption funds should reach your bank or credit
union in just one business day.

Details such as issue date and current value are tracked for you.

You can even set up accounts for minor children and custom accounts for specific
purposes such as education or vacations.

A summary of account activity, including recent purchases, payments, and account
balance, are provided for you.

How long does it take to open a TreasuryDirect
account?

Setting up an online account is easy and can be accomplished in about 10 minutes.

What do I need to do to set up a payroll direct deposit for TreasuryDirect?

2. You submit a request to your employer for a payroll direct deposit (an instruction sheet is
available in your TreasuryDirect account under ManageDirect -
View My Funding Options).

3. Your employer makes a direct deposit for the requested amount from each pay to your
TreasuryDirect account, just like a direct deposit for a mortgage or car payment. The funds go
into a Certificate of Indebtedness (C of I). The C of I is a non-interest-bearing
security that serves as a holding place for your money until you're ready to purchase
a security. You'll use the C of I to pay for the securities you purchase.

4. You can buy savings bonds or marketable securities (Treasury bills, notes, bonds, and
TIPS) once you accumulate enough money in your C of I. For savings bonds, you'll need
at least $25 to make a purchase, and for marketable securities, at least $100. Once you
make a purchase the securities will appear in your TreasuryDirect account. You can set up
recurring purchases in TreasuryDirect in advance.

Individual account owners can now establish a Payroll Savings Plan and schedule automatic recurring purchases of electronic savings bonds. Funds from your payroll direct deposit result in the purchase of a Payroll Zero-Percent Certificate of Indebtedness (Payroll C of I), which earns no interest. Each time your Payroll C of I balance reaches the purchase amount you designate in your Payroll Savings Plan, a savings bond for that amount will be issued. See Learn more about the Payroll Savings Plan for more information.

To use TreasuryDirect, do I need to have a bank account,
Internet access, and an e-mail account?

Yes. You will need to have an account at a financial institution to receive direct
deposit payments and as a potential funding source for purchases. You also will need
Internet access to view and use your account. Finally, an e-mail address is necessary so
that you can receive important messages about your account.

I don't have a computer. Does my employer need to
provide Internet access for me?

We encourage employers to consider providing access to TreasuryDirect at the
employee’s workstation, in a break room, or through the payroll and benefits
office. Such a decision, of course, is at the employer’s discretion.

If I don't receive a paper bond how will I know the
purchase was made?

You can view your account purchases online 24/7.

Why do I have to enter a bank or credit union account
when I open my TreasuryDirect account?

In TreasuryDirect, transactions occur electronically. When you redeem a security,
TreasuryDirect will deposit the payment to the bank or credit union account you select.
You can also request that your bank account be used as a source of funds to pay for
securities purchases.

How long will it take to verify my
information?

Your personal information will be processed in less than a minute after your
TreasuryDirect account information has been submitted.

What if you are unable to verify my
information?

If we are unable to verify your information, we will offer you the opportunity to
complete a convenient, printable form to verify your identity. Just follow the
instructions on the form and submit it to the address provided.

Is it safe to send all of this information over the
Internet?

Yes. The infrastructure TreasuryDirect resides on is well protected and the
TreasuryDirect system uses several features to ensure the safety of the information you
provide and the transactions you perform. For example:

Secure Sockets Layer Technology (SSL): TreasuryDirect uses SSL which is a
common protocol for sending payment information securely over the Internet. SSL works by
using a private, mathematical key to encrypt (or scramble) data transferred between your
web browser and the website you're visiting.

Personalized image and caption: You select an image and caption that identifies the account as yours when you login.

Customer Hold: As an added security feature, TreasuryDirect allows
you to place a hold on your account if you feel your account access information has been
compromised.

Paper Forms: For your protection, changes to your bank information
and certain security transfers require the submission of a signed and certified paper
form.

Where do my payroll direct deposits go?

The amounts you have direct deposited from your pay are delivered to your TreasuryDirect account. They are used to buy a Certificate of Indebtedness (C of I), (or Payroll Certificate of Indebtedness if you’ve set up a Payroll Savings Plan) which is a non-interest-bearing security that serves as a holding place for your money. You'll use the C of I or Payroll C of I to pay for the securities you purchase.

Amounts you keep in your C of I or Payroll C of I earn no interest and remain there until you use them to
make a purchase or redeem them.

Can you tell me more about how the C of I works with my
payroll direct deposit and purchases?

Here is an example. An employee—we'll call her Jane—is paid on a Monday
every other week. Jane requests that $15.00 per pay be directly deposited in her
TreasuryDirect account. It generally takes one business day after an employer or payroll
provider processes the direct deposit for the funds to post to the C of I in a
TreasuryDirect account. In her TreasuryDirect account, Jane schedules the purchase of a
$30 savings bond every four weeks, on Tuesday. Every four weeks, on Tuesday, $30 dollars
is deducted from her C of I and a $30 savings bond is issued in her TreasuryDirect
account. The newly purchased savings bond is added to her holdings in her account the next day.

In a Payroll Savings Plan, Jane schedules the purchase of a $50 I Bond. Each time the amount in her Payroll C of I reaches $50, a $50 I bond is issued in her account.

What is the smallest savings bond denomination I can buy
in TreasuryDirect?

Electronic savings bonds are not sold by denomination. The minimum purchase amount for a
savings bond in TreasuryDirect is $25 and the maximum is $10,000. In between, you can
purchase any amount—down to the penny. There is a $10,000 annual limit per savings
bond series per person.

If I want to buy Treasury bills, notes, bonds or TIPS is
there a minimum purchase limit?

What is the issue date established on savings bonds I buy
in TreasuryDirect?

Savings bonds purchased in TreasuryDirect are posted to your account one business day
after they are purchased. The issue date of the savings bond is the first day of the
month in which the savings bond is posted.

You must take action to schedule purchases in TreasuryDirect. Amounts you keep in your C
of I earn no interest and remain there until you use them to make a purchase or redeem
them. If you want to make recurring purchases you need to schedule them in
TreasuryDirect. They won't occur automatically.

What happens if I stop my direct deposit, and the value of the
C of I is not enough to buy a savings bond?

You can redeem the C of I at any time, directing the payment to a checking or savings
account at your bank or credit union.

My employer will not send direct deposits to TreasuryDirect
for me. Can I participate in TreasuryDirect on my own?

Yes. You can set up an account on your own, and use your savings or checking account as a
source of funds.

Can I put my paper savings bonds in
TreasuryDirect?

Yes. You can trade your paper savings bonds for electronic bonds in TreasuryDirect using
a program called SmartExchange®. With SmartExchange, you can convert Series E, EE,
and I bonds to electronic securities and enjoy all the benefits of having online 24-hour
access to manage your holdings. Plus, your bonds keep their original issue dates.

Questions Specific to Federal Sector Employees

Why are you ending paper payroll plans in phases starting
with federal employees?

Treasury's long-term goal is to one day issue all of our securities electronically.
Printing fewer paper bonds reduces the cost of the savings bond program. Using a phased
approach will help us meet this goal in an orderly way and provide more control of the
process. More than a third of the paper savings bonds issued last year were issued to
federal employees.

The paper payroll program ended for federal employees on September 30, 2010, and for all other (non-federal) employees on January 1, 2011. Treasury accepted payroll purchase orders from federal payroll providers for bonds with issue dates through September 2010.

Does this mean I won't be able to buy savings bonds
at all?

No. We've been working for several years to promote the TreasuryDirect® system
as an alternative to paper bonds. With TreasuryDirect, Treasury can continue to offer
employees the convenience of payroll savings while reducing the cost of the savings bond
program. Employees have the benefit of regularly investing in savings bonds or using
their payroll contributions to purchase a broader range of securities. Savings bonds in
TreasuryDirect are electronic securities in an account; they have all of the benefits of
paper bonds but can't be misplaced or destroyed. Printing fewer paper bonds reduces
the cost of the savings bond program and fits with our long-term goal of one day issuing
all of our securities electronically. Technology makes it possible for us to sell and
maintain savings bonds and other Treasury securities electronically, which lowers the
expense to the taxpayer.

Will federal employees still receive average dating of
savings bonds in TreasuryDirect?

No. Average dating will not be available in TreasuryDirect. However, there are no fixed
denominations, so you can begin to earn interest sooner in some cases. You can purchase a
savings bond for as little as $25 and in any increments over $25 you choose. For example,
you could make a purchase for $25.01 and begin earning interest immediately.

What happens to the partial amounts I contributed that
haven't yet been used?

We're providing a six-month transition period which will in many cases allow
deductions to accrue to the full issue price of a savings bond. We're hoping by
announcing this change early employees will take intervening steps (changing or ending
allotments) to minimize the occurrence of unused amounts. At the end of the transition
period, if there is a residual amount, it will be refunded. Of course, employers and
employees can choose to end deductions at any time.

When will this change take place?

The paper payroll program ended for federal employees on September 30, 2010. Treasury accepted payroll purchase orders from federal payroll providers for bonds with issue dates through September 2010. Employees are encouraged to open an online TreasuryDirect account and continue saving through payroll direct deposit using electronic securities. For details on the TreasuryDirect payroll option visit www.treasurydirect.gov/indiv/products/prod_tdpayrollinfo.htm.

Questions Specific to Employers

When will the paper payroll program end?

The paper payroll program ended for federal employees on September 30, 2010, and for all other (non-federal) employees on January 1, 2011. Treasury accepted payroll purchase orders for bonds with issue dates through September 2010 and December 2010, respectively.

Can employers stop participating in the program
earlier?

We're providing a transition period
(six month for federal and nine months for non-federal) which will in many cases allow deductions to accrue to the full issue price of a savings
bond. If any money remains, it should be refunded to the employees. Of course, employers
and employees can choose to end deductions at any time.

Why should my company offer TreasuryDirect to our
employees?

TreasuryDirect is an easy way for employees to save on a regular basis by purchasing
electronic Treasury securities. With TreasuryDirect your employees enjoy the benefit of
automatic savings with significantly less work and, therefore, less cost to you. You send
each direct deposit to TreasuryDirect each payday; the direct deposit is handled just like one
for a mortgage or car payment. With TreasuryDirect you don't accumulate funds toward
the purchase price of a security, you don't request the issuance of securities, and
you don't keep track of registrations.

2. Then, each will submit a request to you for a payroll direct deposit, providing their
TreasuryDirect account number and the amount they want to have deducted from each pay
period. (An instruction sheet is available in TreasuryDirect to help your employees with
this.)

3. You establish a direct deposit for the amount requested and deliver the funds to the
employee's TreasuryDirect account just as you would to any bank account. It's a
standard ACH transaction, and you can classify the TreasuryDirect account as either checking (type 22) or savings (type 32). We will accept either type.

Delivery instructions:

Receiving bank name – TREASURYDIRECT (all caps, no space),

ABA number – 051736158

Employee's TreasuryDirect account number without hyphens

What are my responsibilities as an
employer?

With TreasuryDirect you would be responsible for collecting the requested direct deposit
amount and delivering it to the employee's TreasuryDirect account, just like you
would a direct deposit for a mortgage or car payment. That's it. With TreasuryDirect
payroll:

You don't need to hold and accumulate funds toward the purchase price of a
security,

You don't request the issuance of securities, and

You don't keep track of registrations.

Many companies provide employees with Internet access to valued sites. If your company
is one of these, we encourage you to provide your employees with a link to www.treasurydirect.gov.

Do you have information we can provide to employees?

Yes. You can find payroll savings information at www.treasurydirect.gov/instit/savbond/mat/mat.htm. The
website has materials you can download or print directly which describe the payroll
option using TreasuryDirect. We also plan to provide a webcast you can show to employees
to help with the transition. It should be available by September 2010. Also, your Treasury
Retail Securities Site (Federal Reserve Bank) stands ready to support you in your
outreach to your employees.

With TreasuryDirect, does the employee need a separate
direct deposit for each registration?

No. One direct deposit can be used to cover all desired purchases.

Does a direct deposit need to be at least $25?

No. Direct deposits can be in any amount, though your payroll system may have a minimum dollar
limit.

What should we do if we've made a mistake with an employee's payroll direct deposit to TreasuryDirect?

Contact the Bureau of the Fiscal Service for assistance at 844-284-2676 (toll free).

Whenever possible, work with your employees to resolve these kinds of errors. Employees can redeem amounts from their Zero-Percent Certificate of Indebtedness and receive payment by ACH the next business day.

What if my payroll system will not accept account numbers that start with a letter?

TreasuryDirect account numbers begin with a letter. If your payroll system will not accommodate account numbers that begin with a letter for the purpose of payroll direct deposit, you will not be able to set up a direct deposit to TreasuryDirect. However, you can still tell your employees that they can open a TreasuryDirect account and use their bank accounts as a source of funds to purchase Treasury securities.